D J Premier is one of the greatest hip-hop producers of all time. He has not only made classics with his own group Gang Starr, but also produced hits for countless elite rappers. We stress this because, when he reflected on his illustrious career in Music Week last year, one name he referenced stood out alongside his stories of working with legends such as Nas, Jay-Z and the late,

great Notorious BIG. The name was Mary Coleman… “She was my first accountant, and I even tattooed her on my arm when she passed,” he explained. “That’s how close we were. She was the one that had to wake me up and say, ‘You’re not Christopher Martin [Premier’s real name] any more, you are now an entity, and you’re not going to walk around with all this cash in your pocket – the company’s going to make the money.’ I was like, ‘Nah, I want the cheques made out to Chris Martin!’ She said, ‘No, you don’t, because then you get taxed twice!’ She mapped it out and then I eventually became a businessman.” Some may think of accountants as the calculator-toting pros who roll in once a year to trawl through artists’ receipts and file tax returns, but they would be wrong. Just ask Åsa Sandberg, director at CC Young & Co Sverige AB, winners of Accountancy Firm Of The Year at the 2020 Music Week Awards. “Over the years I have discussed everything from divorces and childcare to cars and interior design with my clients,” she explains. “I’m not trying to say that I’m an expert in those areas at all! But that comes as part of being a trusted adviser. I am always doing my best to resolve any issues that the client may have and refer them to other professionals when needed. Sometimes, just being a listener is sufficient. I would say that there are more similarities between an accountant and a psychologist than people think.” CC Young is one of the key players in the sector, providing accounting and taxation services to the music, film and

entertainment industries with over 50 people located in London and Sweden. Sandberg leads their Swedish practice, with a client base including DJs, rock bands, songwriters, producers, music companies and more. “We are a truly international firm,” she explains. “Surprisingly, it’s my impression that most Swedish music accounting firms have a very local approach. I am specialised in international tax and I work closely together with my colleagues in the UK office. In addition, we cooperate with music accountants in

the US and have a large network of trusted advisers all over the world. We take lead on the engagement and coordinate activities in the different countries, this gives us an advantage when advising our clients that have international careers.” Another leading firm in the sector is Dales Evans & Co Limited, which celebrated its 25th anniversary last year. Based in central London, and employing around 40 people, almost all of its clients are music industry based, including artists, managers and small labels and publishers. Who is listed among these ranks, you may wonder? Well, the likes of Coldplay and Mumford & Sons to name but two. Paul Makin, director at Dales Evans & Co Limited, very much testifies to the sheer range of skills a modern accountant has to have in an ever-changing industry… “We provide all of the services that you would expect from chartered accountants, including annual accounts preparation and the completion of tax returns, however the biggest component of our work is business management services, in particular to artists,” he explains. “This essentially involves assisting artists in running their businesses, covering everything from advising on the most appropriate structure for their business, making payments and collecting income on their behalf, to reviewing royalty statements, cash-flow management, tax planning and mitigation in respect of UK taxes and foreign withholding taxes and general business advice.” It bears repeating: an accountant is much more than a person

musicweek.com Music Week | 69

“There are more similarities between an

accountant and a psychologist than

people thinkӁSA SANDBERG

CC Young & Co Sverige AB

Fully accounted for: Harris & Trotter LLP clients Ellie Goulding,

Zayn Malik and Anne-Marie

THE NUMBERS GAMEAccountancy has long been one of the most important – yet often overlooked – parts of the music business.

But 2020 changed that. In this special report, leading names in the sector reveal all about their work, and how the coronavirus pandemic has made artists everywhere take a long hard look at their finances...

---- BY GEORGE GARNER ----

Fully accounted for: Harris & Trotter LLP clients Ellie Goulding,

Zayn Malik and Anne-Marie

you should see once a year when you get the April 5 panic attacks… “Year-end tax returns does feel like just a small part of the job, and the rest of it is not necessarily all accounting or business management,” says Makin. “Often I find that my clients like to just run general financial questions past me, such as seeking a second opinion on whether to sell or rent out a property. Sometimes I find that I’m the first port of call to help them deal with something that they’re not sure where to turn to with, so I have developed relationships with many other professionals to support us with this, such as IFAs, mortgage brokers, brokerage firms and private banks. “My role is much more pro-active than perhaps a traditional accountant, and I am involved on a day-to-day basis with most of my clients, be this flagging up issues on royalty statements, highlighting cash-flow matters or commenting on tour costs,” he continues. “This level of involvement puts me in a position to add value to our services at a number of different levels. I pride myself on being easily contactable and highly responsive. The structure of Dales Evans, in which, typically, three or four staff members are assigned to each client, builds a relationship in which they find us easily approachable.” Another top firm looking to work tirelessly on behalf of their clients is Harris & Trotter LLP. And they’ve been doing it for a long time, too, the company recently celebrating its 80th anniversary in 2020. Based close to London’s Oxford Street, the firm offers all aspects of accountancy services covering tax and accounts as well as book-keeping, royalty work and tour accounting. And it represents star names in music, including Ellie Goulding, Rita Ora, Zayn Malik, Depeche Mode, Sade, Years & Years, Kygo, Anne-Marie and Lily Allen. Charlotte Harris is not only a partner at Harris & Trotter, she’s a descendent of it. “The company was set up by my grandfather so I am the third generation of music accountants!” she smiles. “My hope for all clients from the outset is that they will save and spend sensibly and get on the property ladder and I will do whatever I can to help them achieve that,” Harris continues. “This usually means making sure the mortgage, survey and solicitor is in place but also often includes negotiations with the estate agent and interior designers as well as house hunting with them. It’s important to have someone asking the right questions. In the past year I’ve learned more about different species of bats living in a client’s barn than I ever thought I would!” Again, the word accountant only gives a glimpse into the remit of what the job involves in 2021. “We’re available to clients 24 hours a day, seven days a week and, like they do in the US, we take the role of being a business

manager not just an accountant,” she continues. “Our focus is not just meeting tax and accounting requirements, but dealing with every aspect of their personal and business affairs. This has become even more relevant now as artists have time off to think about these things.” The final company Music Week is taking a close look at is Gelfand, Rennert & Feldman (formerly Skeet Kaye Hopkins), another leading business and financial management firm which professes to provide “unparalleled service” to artists, DJs, songwriters, execs, producers, managers, labels and publishers. “We’re the only transatlantic full service firm that, in addition to the basic services, has experienced tour accountants and full service royalty divisions on both sides of the Atlantic,” claims Ewen MacNeil, director of business management at GR&F. “We truly provide a worldwide service for all our clients, however large or small.” With offices in London, LA, Nashville and New York, the company boasts over 500 professionals with decades of experience,

along with a personally dedicated management team. “We are very different to the accounting firms that are seen on the High Street,” says MacNeil. “As we supply full business management services we are often trusted to deal with financial issues that are both personal and business, especially if they are in full touring, or recording, mode. Collecting a client’s car from an out-of-town pound after it had been towed away and having to smooth a relationship with a very disgruntled dog walker who hadn’t been paid by the client and was threatening to take the dog hostage are some of the more unusual experiences.” “I was once asked to meet a client to assist them choose the colour scheme for a new car purchase!” adds Helen Spiers, director, business management at Gelfand, Rennert & Feldman. There have been a lot bigger things to occupy accountants lately, however. “Needless to say, the music industry is a sector significantly affected by Covid-19,” explains CC Young AB’s Åsa Sandberg. “Due to publishing [holding] much of its ground and the value of music rights constantly increasing, some of our clients have not seen that much of a negative effect. For others, more

dependent on touring, it has been a disaster. At the moment I would say that the biggest challenge is that we can’t predict when live will start again and under what forms.” From a lack of revenue streams due to the pause of live music, to high-profile disputes over royalties/contractual terms, 2020 drew more attention to how important it is for artists to have a good understanding of their finances… “With no touring in 2020 we really had much more focus on royalties which led to more attention on the importance of accounting and understanding your finances,” adds Sandberg. “The number of royalty audits in 2020 increased heavily and I believe that this has been an important eye-opener. In the future, royalty audits are likely to be performed on a more regular basis which is good for all parties within the industry. When applying for different types of Covid-19 related governmental support it has been very important to have the financials in order. We have been able to assist some of our clients in showing the negative effects and providing authorities with proper documentation.” “It’s very hard to manage cash flow right now,” says Harris & Trotter’s Charlotte Harris. “A few months ago I was fairly hopeful for summer touring but that’s all changed and I really don’t know when this year, if at all, touring will return properly. For artists that rely on these profits this is a real challenge. The government reliefs were great for some, but I have others that didn’t benefit at all due to their company structure and the

70 | Music Week musicweek.com

“It’s important that artists and managers have a grasp of their

cash flow”JO EWERS

GELFAND, RENNERT & FELDMAN

Play on: Coldplay are among Dales Evans &

Co Limited’s clients

inequity of this is heartbreaking. It’s been important this year to understand what grants/reliefs are available. Clients have also had more time to focus on their finances and ask questions which normally are too far down the priority list. I’ve spent a huge amount of time dealing with clients moving homes and a lot of that has come from lockdown and people re-evaluating their lives.” The pandemic has, seemingly, taught artists some important business lessons. “With touring disappearing literally overnight last year, there was an immediate demand to understand the financial landscape for the rest of the year and how to negotiate it,” says Gelfand, Rennert & Feldman’s Ewen MacNeil. “The sudden slowdown did afford artists and management the time to look at areas of the business, such as contracts, which are traditionally put on the back burner while artists tour.” “I need to ensure, in the absence of live revenue in particular, that I work hard to help maximise my clients’ cash flow,” adds GR&F’s Helen Spiers. “I’ve explored ways to increase existing revenue streams such as renegotiating an existing agreement or undertaking a royalty audit, or looking for new revenue streams such as putting on virtual shows. Maintaining awareness of the ever-changing landscape of grants, loans and government schemes has been a challenging but essential part of my role this year.” “As soon as it was clear that the pandemic was going to end touring for a significant period of time, and a slowing down of other aspects of the industry, we found ourselves rapidly working on revised business projections for almost every client,” reflects Dales Evans & Co Limited’s Paul Makin. “Very few artists haven’t been affected, at least to some degree. It was only by having a solid understanding of their business I was able to assist in planning for such a changed financial environment.” All of this is, of course, without mentioning the dreaded B word. “Additionally, we have to deal with the changes that leaving the European Union has created for our clients, predominantly in relation to how this will affect touring when it starts up again, through to the effect on merchandising, particularly for clients that run their own merchandising operations,” says Makin. “[When] we have all been vaccinated the demand for live performances is going to be bigger than before,” observes Harris & Trotter’s Charlotte Harris. “Once the planning for this gets underway, we’ll see the impact of Brexit on all the regulations and admin.” It has always been good advice to get an accountant, but perhaps more now than ever that guidance rings true. “It is crucial, as an artist particularly, to appoint an accountant with experience of the business so that they

have a ready source of advice available,” says Paul Makin. “Any qualified accountant should be able to prepare accounts and tax returns, but accountants who don’t specialise in music may not be aware of tax averaging rules which can be very beneficial to songwriters whose income may vary considerably from year to year, and they certainly wouldn’t be able to advise on the various different ways to collect neighbouring rights income! I ensure I’m very transparent with my clients. While we ensure that we take care of business matters on their behalf, I’m always conscious that we are dealing with their business and money.” “It’s important to make sure your accountant is chartered or certified,” adds Charlotte Harris. “This means they have a qualification and had to sit lots of exams to get to that place. Lots of people call themselves accountants but don’t have the right qualification and you then put yourself at a higher

risk of error and they may not have suitable insurance to protect you.” Another thing all of our interviewees stress is that it’s crucial to find the right accountant for you.Personality? Rapport? These things matter. “It’s very important, at least if you would like to have an accountant that understands your business and provide you with the best advice,” says CC Young AB’s Åsa Sandberg. “For one-man companies, the financials are generally closely linked to personal [ones]. I can do a much better job if the client is comfortable in sharing their personal plans. That is only going to happen if the client and I understand and respect each other.” “I feel rapport is really important with clients – they need to find you approachable so that they are comfortable asking what they feel might be a ‘stupid’

question,” agrees Jo Ewers, of Gelfand, Rennert & Feldman. “We don’t expect clients to understand how their balance sheet works, but they need to feel able to ask for financials to be presented to them in a way they can digest.” “Clients are generally very happy to chat about something other than just tax returns or monthly spending,” adds Ewen MacNeil. “When you have established other common ground those conversations are generally much easier. If you appreciate their art then they will be much more open to discussing yours. The number of conversations I have regarding new songs, producers, shows, studio processes or equipment makes my world much richer on a daily basis.” Who knows? Maybe one day someone reading this will be doing what DJ Premier did with one of our interviewees’ names.

72 | Music Week musicweek.com

“Year-end tax returns feel like a small

part of the job”PAUL MAKIN

DALES EVANS & CO LIMITED

“Lots of people call themselves accountants

but don’t have the right qualification”CHARLOTTE

HARRIS HARRIS & TROTTER

“I hate to be boring but planning and organising is everything. The best way to take control is to plan and to be one step ahead. Ad hoc solutions tend to be expensive. Planning and being well organised is also crucial for a tax-efficient setup. Financial success goes hand in hand with professional achievements. It’s important to set goals and thereafter define what would be required to achieve these goals. Success requires a lot of hard work and it is my experience that artists and managers with a clear vision tend to be the most productive. Lastly, a warning for ‘super-smart solutions’. Although there are great opportunities to reduce tax, I would recommend some scepticism. When it sounds too good to be true then that is often what it is.”Åsa Sandberg (director, CC Young & Co Sverige AB)

“I would say to surround yourself with good advisers, including accountants, who have experience and understanding of the industry and who have your best interests at heart. So not necessarily the cheapest! And ask questions so that you come to an understanding yourself. Artists and managers should be making their own business decisions, but should be guided by top quality advice.”Paul Makin (director, Dales Evans & Co Limited)

“Never just focus on the fee that’s coming in as that’s not what you have at the end – make sure you know what the net amount to you is – that’s the figure after all the costs from the commissions and taxes and everything in-between. There is a massive difference between these amounts and if you think you are earning the gross figure you are going to get into a real mess.”Charlotte Harris (partner, Harris & Trotter)

“It’s important that artists and managers look ahead and have a grasp on cash flow. If we are to do our job well in running their business, we need to be in the loop on what their plans are, both business and personal, to help them achieve their goals. Communication is key. Also, get a decent tour manager.”Jo Ewers (director, business management, Gelfand, Rennert & Feldman)

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